Every business could encounter financial difficulties. A customer may not pay a large invoice or a natural disaster might force the business to close temporarily. Regardless of what has led to the cash shortage, the business owner must act quickly to meet the company’s obligations.
When this type of situation arises, the business owner should evaluate all resources available to help them get through the crisis. With this information, they can determine which option best meets their needs. The following serve as potential options when any business needs to raise cash fast.
Online Lenders
A business owner may first turn to their bank to get the cash they need to weather the crisis. However, getting funds from a traditional lender often takes time the business owner does not have. For this reason, many businesses look at online lenders, such as King of Kash, in this situation.
In fact, the internet now has several platforms where business owners can submit their applications and loan documentation. The platform then matches the business with potential lenders. The business owner reviews the terms and conditions of each option along with the interest rate to find the best product for their needs.
Cash Advances
Merchant cash advances benefit those businesses that need cash fast but lack the credit history to get the funds through traditional lenders. A merchant account company provides this advance against future credit card sales receipts. In the past, these advances came with unfavorable terms for the borrower, but times are changing.
The business owner needs to look for a lender that offers flexible terms with payments based on sales volume. This helps to reduce the risk of future cash flow problems. Furthermore, the business is not required to put up collateral when they choose this funding option. The assets of the company will not be at risk.
Flash Sales
A business may be able to raise cash by offering a flash sale to customers. One way to do so is to offer customers a discount if they prepay for service. For example, a nail salon might offer customers a discount if they prepay for manicures and pedicures in advance. The customer pays for six months of services now and gets a five percent discount on each service for doing so. The business raises quick cash, and the customer saves money on a service they would pay for, regardless. Another option is holding a sale on regular goods to bring in extra cash.
Crowdfunding
Crowdfunding is often used to gather the funds needed to start a new venture. The person turns to family, friends, investors, and strangers on social media when they believe they have a good idea for a business. They collect funds from these individuals to get their new business off the ground. Today, however, many business owners use this same technique when they need to raise cash quickly. Each person may only donate a small amount, but if the business owner can get enough people to contribute, they’ll find their cash flow problems are resolved.
There are many other ways a business owner can raise cash when the organization runs short on funds. The owner might choose to request credits from vendors or look into invoice factoring. Some business owners reach out to suppliers and request a payment deferral. There are countless ways to raise funds quickly when a business runs short on cash. It’s up to each owner to determine which method they should use.